Analyst: The Federal Reserve's dot plot forecast may return to June, and it would be a surprise hawkish move to cut interest rates once next year

On December 19, Forexlive analyst Adam Button stated: The median interest rate forecast for 2025 in the Federal Reserve's September economic forecast summary is 3.4%, lower than the 4.1% predicted in June. This situation is likely to reverse in December, at least to some extent. The federal funds futures market expects the interest rate at the end of 2025 to be 3.84%, which is almost exactly preparing for two more rate cuts next year. One of them may take place at a meeting in March, and the second one could occur in July or September. If the median estimate of Fed's interest rates remains unchanged or rises to match market pricing, it would not be surprising either. If dot plots only show one further cut, that would be a hawkish surprise causing market volatility.